 Online banking, also known as internet

banking, is an electronic payment system that

enables customers of a bank or
other financial institution to conduct a range
of financial transactions through the financial
institution's website. The online banking
system will typically connect to or be part of
the core banking system operated by a bank
and is in contrast to branch banking which
was the traditional way customers accessed
banking services.
 Some banks operate as a "direct bank" (or
“virtual bank”), where they rely completely on
internet banking.
 Internet banking software provides personal
and corporate banking services offering
features such as viewing account balances,
obtaining statements, checking recent
transaction and making payments.
 The term online banking is basically what is
called internet banking, e-banking or virtual
banking. A customer uses an electronic
medium to visit the website of a banking
institution for financial transactions. Both, the
medium and the financial service provider
together form the term Electronic Banking.
 Home banking is the practice of conducting
banking transactions from home rather than
at branch locations. Home banking generally
refers to either banking over the telephone or
on the internet (i.e. online banking). The first
experiments with internet banking started in
the early 1980s, but it did not become
popular until the mid-1990s when home
internet access was widespread. Today, a
variety of internet banks exist which maintain
few, if any, physical branches.
 The increasing popularity of home banking
has fundamentally changed the character of
the banking industry. Many people are able to
arrange their affairs so that they seldom have
need of a physical branch. Online-only banks
have profited from this shift in the industry.
The absence of brick and mortar locations
allows many online banks to offer
favorable interest rates, lower service
charges, and many other incentives for those
willing to bank online.
 Online banking has become nearly
synonymous with home banking as most
prefer to bank via the internet instead of over
the telephone. Online banks (or banks with
online options) allow access for the majority
of daily, traditional transactions, including
deposits, checking account services, and
some basic financial products like savings
accounts. Online banking is generally
available for both individuals and small
businesses.
 Mobile banking is the act of making financial
transactions on a mobile device (cell phone,
tablet, etc.). This activity can be as simple as a
bank sending fraud or usage activity to a client’s
cell phone or as complex as a client paying bills
or sending money abroad. Advantages to mobile
banking include the ability to bank anywhere and
at any time. Disadvantages include security
concerns and a limited range of capabilities when
compared to banking in person or on a
computer.
 Mobile banking is very convenient in today’s
digital age with many banks offering
impressive apps. The ability to deposit a
check, to pay for merchandise, to transfer
money to a friend or to find an ATM instantly
are reasons why people choose to use mobile
banking. However, establishing a secure
connection before logging into a mobile
banking app is important or else a client
might risk personal information being
compromised.
 Cybersecurity has become increasingly
important in many mobile banking
operations. Cybersecurity encompasses a
wide range of measures taken to keep
electronic information private and avoid
damage or theft. It is also used to make data
is not misused, extending from personal
information to complex government systems.
 Backdoor attacks, in which thieves exploit
alternate methods of accessing a system that
don't require the usual means of authentication.
Some systems have backdoors by design; others
result from error.
 Denial-of-service attacks prevent the rightful
user from accessing the system. For example,
thieves might enter a wrong password enough
times that the account is locked.
 Direct-access attack includes bugs and viruses,
which gain access to a system and copy its
information and/or modify it.
 A virtual bank doesn't have to pay for
physical branches nor the employees to staff
those branches. This is a tremendous cost
savings, and the savings are usually passed
along to customers in the form of higher
interest rates on savings, lower interest rates
on loans and lower banking fees.
 Five Advantages of Online Banking.
Most banks offer online banking, and you can
pay your bills, transfer money, and access a
record of your checking account transactions,
all from your web browser. Banking from the
comfort of your sofa makes everything you
do with your finances a bit easier.
 Two of the biggest advantages to online-
only banking are the high interest rates and
low fees. Online-only banks don't pay
overhead for physical branches or the
employees to staff them. Instead, they pass
those cost savings on to customers in the
form of higher interest rates and lower fees.
 Electronic Payment is a financial exchange
that takes place online between buyers and
sellers. The content of this exchange is
usually some form of digital financial
instrument (such as encrypted credit card
numbers, electronic cheques or digital cash)
that is backed by a bank or an intermediary,
or by a legal tender.
 An electronic payment is any kind of non-
cash payment that doesn't involve a paper
check. Methods of
electronic payments include credit cards,
debit cards and the ACH (Automated Clearing
House) network. The ACH system comprises
direct deposit, direct debit and electronic
checks (e-checks).
 Using digital payment can be the biggest
motivator for easy money transactions. Since
it is digital, there will be no need to carry
cash, cards or even queue to withdrawals
money at ATM. ... Using
digital payment also can be safer and easy.
 Online banking service to make the transaction
process easy and safe.
 ATM and debit card services to provide instant
cash to the customers.
 Phone banking service to benefit the customers
by saving their time.
 SMS banking to provide alerts and information to
the customers.
 Mobile banking to provide ease to the customer
for making transactions using mobile phones.
 Fund transfer services through various channels.
 Point of sales banking.
 The electronic medium has always provided
the innovative base to the banking
institutions in their progressive journey of
providing better, safe, and easy services to
the customers. The earliest mode of
transactions, the cheques, were first
introduced in Indian banking system by
Bengal Bank in 1784. Then came ATMs in
1987. HSBC took the initiative of introducing
ATM in India. In India, ICICI introduced
internet banking facility.
 The extensively used Electronic Banking service
among customers in India is ATM. Today ATM service
is not confined to withdraw cash only as it was in the
beginning. Customers use this facility for various
other purposes including
 To enquire about account balance
 To get bank statement of a limited period of time
 Customers can use ATMs for changing PIN.
 Customers can also use ATMs to deposit Cash
 Customers can use ATMs to deposit cheques
 Customers can use ATMs to transfer amount to other
bank accounts
 Customers can make Credit Card Payments
 Development of Electronic Banking has been
expedited by initiatives from Indian
Government and the RBI (Reserve Bank of
India). The Indian Central Government has
enacted an IT ACT concerning development,
legalities, and other issues of e-banking. This
IT Act, 2000 is responsible for recognizing
whether an electronic transaction is legal or
not. The other platforms of electronic
commerce also stand within the legal
periphery of the IT ACT, 2000.
 Advantages of e-banking are numerous. It
provides ease and convenience to the
customers in operating an account. The
customers can conduct transactions of
different types using platforms like bank
website, online applications, e-commerce
portals, etc.
 It saves time, manpower, and resources of
the banks.
 The banking has become cheaper using this
technology.
 Efficiency of banks has
 The reach of banks is wider than earlier.
 Customers can manage almost every type of
transactions using e-banking.
 Bill payments, sale-purchase, operating
Demat Accounts, money transfer, and a
number of convenient services provided by
the banks are now can be operated through
one channel i.e. Electronic Banking.